Yahoo! Plummets After Microsoft's Exit

SAN FRANCISCO -- The pressure is on for Yahoo!(YHOO Quote) to make it up to shareholders after botching a $47.5 billion deal with Microsoft(MSFT Quote).

Shares for the Internet giant were taking a nosedive after Microsoft officially withdrew its offer on Saturday, sending Yahoo!'s stock tumbling as much as 20% Monday morning before recovering some of its value. Shares were recently down more than 15% or $4.34, to $24.33.

Microsoft had upped its bid to $33 a share from its original offer of $31 a share, but Yahoo! held firm at $37 a share, resulting in the deal's eventual collapse.

Cramer: Yahoo! Is in the House of Pain

Yahoo! Chief Executive and co-founder Jerry Yang, who had all along maintained that Microsoft had been undervaluing his company, issued a statement on Saturday seeking to assure shareholders that the future is still bright.

"I am incredibly proud of the way our team has come together over the last three months," he said. "This process has underscored our unique and valuable strategic position. With the distraction of Microsoft's unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users."

It will take a lot more than that, however, to convince investors that Microsoft wasn't Yahoo!'s best option.

"Clearly we're disappointed," says Darren Chervitz, director at the Jacob Internet Fund, which has a position in Yahoo! "We do believe that the offer Microsoft presented, and certainly its revised upward bid, is going to be difficult for Yahoo! to replicate on its own in a reasonable amount of time."

< Previous

1 2 3 4

Next >